The number of active oil and gas rigs in the United States rose again this week, this time by 12, resuming what was the US shale patch’s impressive run of 23 weeks of steady gains, prior to last week’s decrease of a single rig.
The number of oil rigs in operation increased by 7, while gas rigs increased by five—putting to rest any lingering optimism that last week’s decrease in rigs was a sign of an upcoming downward trend in the number of active rigs. Combined, the total oil and gas rig count in the US now stands at 952 rigs, which is 512 rigs over a year ago today.
Prices were down earlier on Friday—with WTI trading down 2.81% on the day at $44.24. Brent was down 2.85% at $46.74 at 12:17pm EST. While US crude oil inventories are in the “upper half of the average range for this time of year” according to yesterday’s EIA report, and while rumors surfaced today—again—that OPEC would consider deeper cuts and that Russia would at least consider it, prices continued to fall. The sharp increase in rigs will undoubtedly weigh further on prices, and it looks like US shale is still resisting warnings that its strong weekly gains are set to wreck the oil market.
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In the first eight weeks of 2017, oil rigs increased by an average of 10 per week. The following eight weeks, from March 3 until April 21, oil rigs gained an average of 11 per week. The eight-week period ending June 16, however, showed an average of only 7 oil rigs added per week, suggesting that the pace at which rigs are being added in the US has slowed.
At 13 minutes after the hour, WTI was sliding further, down 3.19% at $44.07, with Brent trading down 3.12% at $46.61.
By Julianne Geiger for Oilprice.com
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